As I mentioned earlier, I have a family health situation to attend to over the next several days.

So I will be cutting out early today.

Thanks for reading my diary today and all week. For that matter, all year!

Enjoy the weekend.

It is always good to get a different perspective and you will be in the very capable hands of "Meet" Bret Jensen on Monday and Tuesday.

"Just one more thing."

- Lt Columbo

Senator McCain says "I cannot in good conscience vote for the Graham-Cassidy proposal."

This should stop the administration's healthcare package.

Tweet of the day (part deux):

Our trading short in FacebookFB LINK is starting to work.

High above the Alps my Gnome is hearing vague rumors that the controlling family of Dillard's (DDS)  is considering a going-private transaction (like Nordstrom (JWN) ).

One can only hope.

I would not chase DDS if it rallies, as it has not paid to chase any retail deal rumor.

However, I plan to be a continued and patient accumulator.

Eight days ago I shorted more Amazon (AMZN) at $999. Since then the shares have declined to under $958:

Starting to Short Amazon Again

Sep 14, 2017 ' 8:45 AM EDT

After having covered my Amazon (AMZN) short at around $950 I suggested I would re-establish a medium-size short at $975 to $980.

With the market's strength I decided to give the stock a wider berth.

I just began to re-establish a more significant AMZN short in premarket at $999.

My thesis remains the same -- that political and antitrust forces represent an existential threat to the company's horizontal and vertical expansion plans.

I am still small in size, however.

I just covered half of my Amazon short at $958 -- moving from medium sized to small sized. (This has been my third profitable trade in the name with cumulative gains in excess of $100/share

Ceteras parabaa I will begin re-shorting the shares back in the $980 area.

I remain of the view that Amazon is an attractive investment short (that I trade around) based on the political and anti trust existential threats

AMZN was placed on my Best Idea List (short) in July, 2017 at $1007/share.

So as sure as the sun will shine
I'm gonna get my share now of what's mine
And then the harder they come
The harder they'll fall, one and all
Ooh the harder they come
The harder they'll fall, one and all

- Jimmy Cliff, The Harder They Come

It was only a few days ago that I was trading Apple (AAPL) $162.50 puts.  (The shares are currently -$2.75 to $150.77)

Like Amazon (AMZN) , the harder they come the harder they fall.

Lesson? Always consider the contrary.

The Russell Index is crowing again today.

iShares Russell 2000 ETF  (IWM) +0.6%
SPDR S&P 500 ETF  (SPY) -0.1%
PowerShares QQQ ETF  (QQQ) -0.2%

From The Wall Street Journal: "What If Apple's Supercycle Isn't So Super?"

This has been my investment thesis about Apple (AAPL) for some time.

While the consumer packaged goods stocks are stable today, yesterday they got schmeissed.

Campbell Soup (CPB) was down by over $1, Procter & Gamble (PG) $1.70, Unilever (UN) $1 and so on.

This space represents a secular investment short for me.

To me these are low-risk shorts.

iShares 20+ Year Treasury Bond ETF (TLT) is at the high of the day.

I'm adding to my financial shorts now.

I will be out next Monday and Tuesday as I have to attend to a family health issue.

However, you will be in the capable hands of the great Bret Jensen.

I took in some of my Apple (AAPL) short for a profit close to $151.20 in the early going.

I've moved from medium in size to small.

I'm just trading and trying to ring the register.

I plan to re-short on strength in a possible failure at the breakdown point ($154).

The 5s/30s yield curve has dropped to 91 basis points, a level that has marked the last two recessions. 

Speaking of bonds, iShares 20+ Year Treasury Bond ETF (TLT) , up 65 cents at the outset, continues to offer a negative market tell.

The yield on the 10-year pierced 2.25% to the downside and is three basis points lower on the day.

This morning my good friend Peter Boockvar, chief market analyst with The Lindsey Group, discusses more Fed speak, China and other items:

Non voting Fed member John Williams who has been on board with QT and the rate hikes believes that 2.5% will be where the Fed funds will end up being as 'normal.' Well, they are only half way there in the 9th year of this expansion. It is this belief shared by others why they will be hiking again by year end, all else equal. We hear from two other Fed members today, one voting and one not voting in December. Robert Kaplan of the Dallas Fed will be voting and he's been waffling on another rate hike while Esther George who does not vote will be pushing for another one. We close the week with a 66% chance of another rate hike in 3 months.

Business confidence continued to improve in Europe in September. The eurozone manufacturing and services composite index rose 1 pt m/o/m to 56.7 to 4 month high and that was 1.1 pts above the forecast as both components were higher vs August. There was bifurcation though in terms of geography as Germany and France led the gains while "elsewhere, growth of business activity waned to a 6 month low." Manufacturing was a particular bright spot in spite of the higher euro "with export sales playing an important role in pushing order books higher and encouraging further investment in capacity expansion" according to Markit. Employment was also good, especially on the manufacturing side. Along with the better economic growth, which Markit estimates to be higher by .7% q/o/q annualized in Q3, have come greater price pressures. "Input cost and selling price inflation gathered pace for a 2nd successive month, with both reaching the highest rates since April. Prices charged for services rose to the greatest extent since May, while the increase in factory gate prices was the highest since June 2011."

Bottom line, Mario Draghi has every reason next month to announce another cut in asset purchases. The euro is higher in response to the data and close to $1.20 again but European bourses are up anyway while sovereign bonds are unchanged. Keep in mind again though that these confidence figures are only measuring direction of change. We've seen some recent moderation in the actual German hard data.

Markit's measure of US manufacturing and services will be announced at 9:45am est.

After the 2nd highest print since 1995, the CBI UK industrial orders index fell by 6 pts in September to 7 vs the estimate of no change at 13. CBI said "Both total order books and export order books remained strong, although total order books softened somewhat in August. The deterioration was relatively broad based with 9 of 17 sub sectors reporting a decline relative to August." Price inflation remained high "but have eased compared with the first half of 2017."

Bottom line, the UK economy remains in this vortex of going along with pretty good global growth, particularly in Europe, but at the same time dealing with limited visibility on the part of Corporate UK on how Brexit and trade agreements will play out along with a UK consumer that is dealing with falling real wages. On the data miss, the pound is lower but still holding $1.35 and the weaker pound is helping the FTSE 100 rise by 1/3 of a percent. The 10 yr Gilt yield is holding at the highest level since early February.

The Chinese government did not take the S&P downgrade of its credit rating silently. A Ministry of Finance official said "It is mind boggling for S&P to lower China's sovereign rating in such a situation" and believes the downgrade was a "misreading of China's economy." It's more likely that the timing of the downgrade was more of a thorn as the Party Congress starts on October 18th and Chinese officials are praying for market stability before then. Either way and looking past the optics, China has a large debt problem that they acknowledge but must deal with. The yuan is a touch lower while the Shanghai comp was down just .1%. Most of Asia was down more in response to the North Korean hydrogen bomb threat with the Kospi down by .7%.

"'A bull market is like sex. It feels best just before it ends.'"

- Warren Buffett

Excuse me for being redundant, but the following Jim Rogers quote that I posted yesterday underscores Mark Twain's famous quote that "history doesn't repeat itself, but it often rhymes":

"When things are going right, we all need a 26-year-old. There's nothing better than a 26-year-old in a great bull market especially in a bubble. They're fearless. They don't know. It will never end. They will tell you why it will never end. They know that it cannot end and will never end. So in the bull market, you've got to have a 26-year-old. But when they end you don't want the 26-year-old around... they make a lot of money. They don't know why they made money. So they don't know why they lose money. They don't know what happened."
--Jim Rogers on Realvision

Back in 1997 I wrote this editorial in the Other Voices section of Barron's that echoed Rogers' recent quote. 

In the difficult business of piling up a fortune everyone has an infallible strategy and a set of assumptions, technical and./or fundamental, that leads them to investment nirvana.

But it is never easy. The rules change and so do the players.

From my perch I steadily have listened to the irrational being rationalized as the bulls declare, with straight-faced confidence, that valuations in the 95% decile should be ignored because a synchronized global expansion will "earn out" from these extended metrics.

This confidence is expressed despite a plethora of possible adverse outcomes, particularly in the interconnected world in which we live.

The positive outcome of steadily expanding global growth coupled with low inflation and equally low interest rates may yet prove to become reality. Geopolitical friction may subside. Political partisanship in Washington, D.C, may succumb to cooperation, leading to the initiation of tax and regulatory reform and the repatriation of overseas corporate cash. The Orange Swan may wake up and reject the extreme influences of the Republican right. Trump may stop threatening a war with North Korea in a ping-pong of outrageous and provocative tweets. The rate of growth in real GDP may expand to 3% and we may be in another new paradigm of uninterrupted growth. S&P profits will grow at a rate of 8% annually, ad infinitum. The transition from quantitative easing (QE) to quantitative tightening (QT) may be an easy one that fails to disturb the fixed-income markets. Natural disasters will be a thing of the past and global warming concerns are nonsensical. The North Korean Rocket Man may be all hat and no cattle. The proliferation of ETFs, which in number now exceed the number of listed equity securities, and the ever-present quant strategies that are ignorant of fundamentals may not yield a "flash crash," easily accommodating any selling waves. Every dip will continue to be bought. And interest rates and inflation may be in a permanent stage of adolescence.

But, I am blinded by a sense of history, and the belief that few of the conditions in the last paragraph are likely to be met.

In our flat, interconnected and network world, the odds favor less stability over more stability.

To this observer the markets' dominos are exhibiting signs of falling around all over -- in consumer packaged goods, in (T)FANG, in retail and elsewhere. Yet the selective memory of the talking heads in the business media emphasize the narrowing field of outperforming stocks (e.g., Nvidia Corp. (NVDA) and Deere & Co. (DE) ) that have been working, failing to see those falling dominoes around them.

Fear and Doubt Have Left Wall Street

The ever-present risk to the contrarian is that, over the short term, the past literally is repetitive and the crowd typically outsmarts the remnant. Tuesdays always follow Mondays and Wednesdays follow Tuesdays. But as we extend time cycles, history seems to move from repeating itself to rhyming with the past.

History undoubtedly teaches lessons about investment, but it does not say which lesson to apply when. "Find value, always" is as good a precept as any, but value is subjective and its definition is liable to change. In highly speculative markets, value means, to most, "it is going up."

Stay abreast because in bull markets there is rarely a clear demarcation between progress and fantasy. I remain of the strong belief that we are in a Bull Market in Complacency that likely ends poorly and that has reduced the upside and has expanded the potential market downside.

To the bullish cabal the market "feels" great now (for, as Warren Buffett says, it is because, like sex, if feels best at or near the end), but after an eight-year bull market it may be time to consider the investment contrary. As James Surowiecki wrote in "The Wisdom of Crowds":

"Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise."

Investment returns likely have been pulled forward by central bank liquidity, low interest rates and passive investing. However, over the next five years returns may be substandard at best, but more likely, negative. At worse, we face an incipient bear market.

As expressed in yesterday's opener, the nature of and players in the investment business have changed. This helps to explain the Teflon nature of the S&P 500 Index.

But as Grandma Koufax used to say, "my matzah brei doesn't grow to the sky," and every day we move closer to a Minsky moment.

The salutary environment perceived by many today may be transitory and weak in foundation. The potential political, geopolitical, economic and market outcomes are many, and a clear and market-friendly path is not certain.

Bottom Line

The name of the game is money. It was Lord Keynes who first saw that the handling of it is a game. Most discussions of money and investing speak only of economics and statistics, but that's only a part of the game. The other part is people, individually and together, the emotional investor and the irrational crowd.

And it again might be the market scene that is often (as it was in 2000 and 2007) seen only in kids' eyes or in the eyes of older investors who behave like 26-year-olds at or near the end of every significant bull market cycle:

"'See, see,' said the Great Winfield. 'The flow of the seasons ! Life begins again! It's marvelous! It's like having a son! My boys! My kids!'"

--Adam Smith, "The Money Game"

Do some reading over the weekend as it appears that the only thing many investors have learned from history is that they haven't learned from history.

Apple (AAPL) shares are trading in the premarket at $152.55, below the trend line (of $154) in place since November 2016.

This is a rough reproduction of the email I received this morning from Apple: